In a surprising turn of events, Artifact, the AI-powered news app that evolved from a news aggregator, is officially closing its doors. The startup made this announcement through a blog post on Friday, expressing that the decision to “Wind down operations” stems from the realisation that the market opportunity for the app wasn’t substantial enough to justify continued investment.
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Artifact: A Social News Aggregator Redefining Personalised News Consumption
Artifact, a cutting-edge social news aggregator app and AI-powered news app, has made waves in the digital space since its launch in January 2023. Developed by Nokto, Inc., founded by none other than Kevin Systrom and Mike Krieger, the masterminds behind Instagram, this app uses recommender systems to provide users with tailored article suggestions. Available for both iOS and Android platforms, Artifact’s name is a clever amalgamation of “Articles,” “Artificial Intelligence,” and “Fact.”
Nokto, Inc., was established as a foreign stock company in California on March 3rd, 2022, with its headquarters situated in the vibrant tech hub of San Francisco. Notably, Artifact marks the first product launch by Krieger and Systrom since their departure from Instagram in 2018 following conflicts with Meta, the parent company that acquired Instagram in 2022. Artifact, as an AI-powered news app, made its official debut on January 31st, 2023, after more than a year of development. The app initially invited users to join a waiting list for its private beta, attracting around 160,000 eager participants, before launching its open beta on February 22, 2023.
Users of this AI-powered news app could curate content from across the web, with the addition of AI tools for news summarisation and headline rewriting. However, these alterations seemed to dilute the app’s original value, evolving into a Twitter replacement and entering a market already saturated with competitors, including Meta’s Instagram.
Kevin Systrom’s Insight on Market Realities and the AI-Powered News App’s Future
In the face of the shutdown, Kevin Systrom, co-founder of Instagram and visionary behind this AI-powered news app, shed light on the importance of recognising market realities. His emphasis on making tough decisions early on for the collective benefit reflects a strategic mindset. Despite the closure, Systrom’s optimism prevails as he envisions a future brimming with opportunities, particularly in AI-powered news apps and related markets.
As Artifact starts its shutdown journey, a commitment to user satisfaction remains at the forefront. The process involves discontinuing features like commenting and posting, ensuring a smooth transition. Existing posts will retain visibility temporarily, with the core news capability of the AI-powered news app continuing to operate until the end of February.
SmartNews Faces Turbulent Times: Leadership Change and Plummeting User Numbers
Artifact’s closure coincides with a competitive phase in the market, with a decline in usage for other news aggregators like SmartNews. In a tumultuous year, 2023 began with a series of significant challenges. January witnessed widespread layoffs within the company, and recent developments culminated in a leadership transition. The company’s woes, however, extend beyond internal shifts, as recent data from app intelligence providers Sensor Tower and Appfigures reveals a substantial decline in both downloads and active users.
Founded in Japan in 2012, SmartNews expanded its reach to the U.S. in 2014 and further broadened its local news coverage in early 2020, spanning thousands of U.S. cities. The shifting dynamics in the news industry, marked by changes in algorithms on major platforms like Google Search and social networks such as Facebook, have impacted news traffic and ad sales. Concurrently, evolving consumer preferences have contributed to SmartNews’s struggle to attract and retain users.
While SmartNews boasted 10 million monthly active users not too long ago, recent estimates from Appfigures indicate a stark decline in daily downloads, dropping by half since January, with only a fraction of the daily downloads observed in 2022. The cumulative total of instals since 2020 stands at around 45 million.
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Artifact’s Journey Sheds Light on Opportunities and Challenges
The changing market for news consumption, marked by the rise of AI, has significantly impacted the industry, leading to lawsuits and licensing deals. The uncertainty around Artifact’s identity – whether it was meant to be a conversation platform, a link discovery platform, or an AI-powered news app – may have contributed to its inability to capture users’ attention. Despite Artifact’s closure, Systrom highlights the continued importance of news and information in startup investment, expressing confidence that other innovative minds are actively working on ideas in this AI-powered news app space.
Artifact’s store shows the potential and challenges of using AI to address news consumption. On one hand, Artifact demonstrated how AI can help users access and consume news in a more personalised and engaging way and how it can create a more social and interactive platform for news sharing and discussion.
On the other hand, Artifact also revealed how AI can pose some ethical and legal issues, such as the accuracy and credibility of the news content, the privacy and security of the users’ data, and the ownership and responsibility of the AI-generated content. Artifact’s story also shows the importance of having a clear and consistent vision and identity and a viable and sustainable business model for any startup that wants to succeed in the competitive and dynamic market of AI and news.